Now that bailed-out banks are reporting record-breaking profits, the U.S. taxpayer, who bought into these institutions at bottom-barrel prices, could wind up on the winning end of a nice profit. That's what happens, after all, when you buy low and sell high.
When Congress bailed out Wall Street, it required banks to give warrants to the treasury. That way, if the market turned around and a bank's stock rose, the taxpayer could profit. Indeed, the notion that the taxpayer might profit from the bailout was floated by members of Congress on both sides of the aisle.
The Congressional Oversight Panel, however, looked into the early sales of warrants and found earlier this month that Treasury would only get about 66 percent of the market value for the warrants. And it was doing so in private negotiations with the banks.
A group of Democrats in Congress want to end that practice. A bill introduced by Rep. Mary Jo Kilroy (D-Ohio) would require the Treasury to sell warrants in a public auction and do so in a transparent way. On Wednesday, the Financial Services Subcommittee on Oversight and Investigations holds a hearing on the sale of warrants, focusing on protecting profits for the taxpayer.
I'm all for dealing us out. The quicker the Banks get on their feet, and give us back the money, the better. But we sure as hell shouldn't be taking a loss on this crap. If they lose money or go kaput, then find. We tried. We took the risk, it didn't work out. But if they make money, we make money. End of discussion.
